CMA Real Estate: How to Do a Comparative Market Analysis
A CMA (comparative market analysis) is the process of determining a property's market value by comparing it to similar recently sold properties in the same area. For real estate investors, a CMA is the foundation of every deal analysis — it tells you what the property is worth before and after repairs, which determines whether the numbers work for a wholesale, flip, or rental acquisition.
This guide walks through the complete CMA process: finding comps, selecting the right ones, making adjustments, and arriving at an accurate value estimate. Whether you are calculating after repair value (ARV) or evaluating an as-is offer, this is the process.
What is a CMA and who uses it?
A CMA compares a subject property to comparable sales (comps) to estimate market value. Real estate agents prepare CMAs for listing presentations. Appraisers follow a more formal version for bank-ordered appraisals. Investors use CMAs to calculate ARV, evaluate purchase prices, and validate deal assumptions.
The investor's CMA is typically less formal than an appraisal but follows the same logic: find similar properties that sold recently nearby, adjust for differences, and estimate the subject property's value.
Step 1: Define your comp criteria
Good comps share these characteristics with your subject property:
| Criteria | Ideal Match | Acceptable Range |
|---|---|---|
| Location | Same subdivision | Within 0.5-1 mile, same school district |
| Sale date | Last 3 months | Last 6-12 months |
| Square footage | ±10% | ±20% |
| Bedrooms | Same count | ±1 |
| Bathrooms | Same count | ±1 |
| Year built | ±5 years | ±15 years |
| Property type | Same type | Same type (don't mix SFR and condo) |
| Condition | Similar condition | Adjust for differences |
For ARV calculations: Your comps should be in the condition you expect the property to be in AFTER repairs. If you are calculating what a fully renovated property would sell for, use comps that are already renovated. For as-is value, use comps in similar current condition.
Step 2: Find your comps
Sources for finding comparable sales:
- MLS data. The most reliable source. If you have MLS access (through an agent or investor-friendly platform), search by the criteria above. MLS includes sold price, days on market, listing photos, and property details.
- County records. Public records show sale prices (in disclosure states), deed dates, and property characteristics. Free but requires more manual work.
- Online platforms. Zillow, Redfin, and Realtor.com show recent sales with photos and details. Useful for initial research but may not include all transactions.
- Investor analysis platforms. Deal analysis tools pull comp data automatically and let you filter and adjust. See our guide to comp analysis tools.
Step 3: Select 3-6 comps
You need 3-6 comparable sales. More than 6 dilutes your analysis. Fewer than 3 is not enough data for confidence.
Selection priority:
- Same subdivision, last 3 months. These are your best comps. Always include them if available.
- Same neighborhood, last 6 months. Expand if you cannot find enough in the immediate area.
- Nearby area, last 12 months. Last resort. Make sure the expanded area has similar demographics and price points.
Exclude outliers: distressed sales (foreclosures, short sales) unless your subject is also distressed, family transfers ($0 or $10 sales), or properties with characteristics too different from your subject (commercial zoning, significantly different lot size).
Step 4: Make adjustments
No two properties are identical. Adjustments account for the differences between each comp and your subject property.
Common adjustments
| Feature | Typical Adjustment | Notes |
|---|---|---|
| Square footage | $50-$150 per sqft | Varies by market. Use price-per-sqft of similar recent sales. |
| Bedrooms | $5,000-$15,000 | Going from 3BR to 4BR adds value; 2BR to 3BR adds more. |
| Bathrooms | $3,000-$10,000 | Full bath vs half bath matters. |
| Garage | $5,000-$20,000 | Attached vs detached, 1-car vs 2-car. |
| Pool | $10,000-$30,000 | Market-dependent. Pools add more value in warm climates. |
| Lot size | Varies | Significant only if lots differ by 25%+ or have waterfront/view. |
| Condition | $10,000-$50,000+ | The biggest variable. Updated kitchen/bath vs original. |
| Age | $1,000-$5,000/year | Newer homes command premiums for systems, insulation, layout. |
How adjustments work
Adjustments are always applied to the comp, not the subject. If a comp has something the subject does not (e.g., a pool), subtract the pool's value from the comp's price. If the subject has something the comp lacks, add value to the comp's price.
Example: Subject is a 3BR/2BA, 1,800 sqft with no pool. Comp sold for $280,000 — it is 3BR/2BA, 2,000 sqft with a pool.
Sqft adjustment: comp has 200 more sqft × $100/sqft = −$20,000
Pool adjustment: comp has pool, subject does not = −$15,000
Adjusted comp value: $280,000 − $20,000 − $15,000 = $245,000
Step 5: Reconcile and determine value
After adjusting all comps, look at the range of adjusted values. Your estimated value should be based on:
- Weighted average. Give more weight to comps that are more similar to your subject (closer location, more recent sale, fewer adjustments needed).
- Median. If your adjusted values cluster tightly, the median is a reliable estimate.
- Range. If values span $230,000-$260,000 with most clustering around $245,000-$250,000, your estimate is $245,000-$250,000.
Avoid cherry-picking the highest comp. Your buyer (whether a flipper or an appraiser) will use the same comps and arrive at a similar value. Conservative estimates protect your assignment fee and your reputation.
CMA vs. appraisal
A CMA and an appraisal follow the same methodology, but there are key differences:
| Factor | CMA | Appraisal |
|---|---|---|
| Performed by | Agent, investor, or software | Licensed appraiser |
| Cost | Free (DIY) or included in platform | $350-$600 |
| Purpose | Estimate value for offers/analysis | Bank requirement for lending |
| Legal standing | Informal | Formal, regulated |
| Adjustments | Estimates based on market knowledge | Documented, supported methodology |
For investors, a CMA is sufficient for making offers and analyzing deals. Appraisals come later in the process — typically ordered by the buyer's lender before closing.
Common CMA mistakes
- Using comps that are too far away. A comp 3 miles away in a different school district is not comparable, regardless of how similar the house is.
- Ignoring condition. Two houses with the same specs can differ by $50,000+ based on whether the kitchen and bathrooms are updated.
- Using list prices instead of sold prices. What a seller asks is irrelevant. What a buyer actually paid is the data point.
- Not adjusting for time. In appreciating markets, a comp from 12 months ago may need an upward time adjustment. In declining markets, the opposite.
- Too few comps. One or two comps is not enough. Aim for 3-6 to establish a defensible range.
Using technology for faster CMAs
Manual CMA research (pulling county records, searching MLS, calculating adjustments on a spreadsheet) takes 30-60 minutes per property. Modern platforms accelerate this:
- Automated comp pulling. Enter an address, get 10-20 potential comps ranked by similarity, with property details and sale data pre-populated.
- Interactive maps. See comps plotted on a map relative to your subject. Visually verify location quality.
- AI-powered adjustments. Some platforms use AI to suggest adjustments based on property photos and condition data, reducing the manual work.
- Per-square-foot analysis. Automatically calculate and compare price per square foot across comps to identify outliers.
Deal Run provides automated comp analysis with map and grid views, letting you filter by distance, date, and property type. You select your preferred comps and the platform calculates your ARV from the adjusted values.